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    Fed: Janet got her groove back - Rabobank Sandeep Kanihama

    Philip Marey, Senior US Strategist at Rabobank, suggests that overall, Fed Chair Janet Yellen seems to have regained some of her confidence between the press conference at the conclusion of the last meeting of the FOMC on June 15 and today’s testimony to the Senate Banking Committee.Key Quotes“She said it is important not to overreact to one or two reports, and several other timely indicators of labor market conditions still look favorable. One notable development is that there are some tentative signs that wage growth may finally be picking up.However, the FOMC will be watching the job market carefully to see whether the recent slowing in employment growth is transitory, as they believe it is. During the Q&A she said that there was a substantial slowdown from 200K to 100K (after correcting for the Verizon strike) in nonfarm payroll growth in April-May, and it is important to see ongoing progress in the labor market. If the current employment growth slowdown is a reflection of the GDP growth slowdown in Q1, then she is hopeful that we will see stronger job gains going forward.In her prepared speech, she said that the recent pickup in household spending, together with underlying conditions that are favorable for growth, lead her to be optimistic that we will see further improvements in the labor market and the economy more broadly over the next few years. As the transitory influences holding down inflation fade and the labor market strengthens further, the FOMC expects inflation to rise to 2% over the medium term.”

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